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The 60 second treasurer - Building Treasury from Scratch

Published in September 2015 this is the journey of Jennifer Ceran, former VP Finance at Box, eBay and Cisco System and currently CFO at Quotient (Formerly Coupons.com).

Box is a company that has grown rapidly from $50 million in revenue in 2012 when Ceran joined, to nearly $300 million now and is expanding internationally.

What are the challenges going to a small high growth company?

I found it an energizing experience. When you go to a small company, things move faster and high growth companies are interesting. Box started in 2005 but had no meaningful revenue until 2010. When I joined it was still a relatively small company at $50 million in revenue. It is a huge advantage to join at that size because the decisions you make early on, particularly the international ones, affect the business in the future. So for example, choosing the functional currency can really impact your hedging later on as you grow globally. Being able to set things up right from the start is a huge benefit for a company that could have multibillion dollars in revenues in the next few years.

What questions do you have to answer when you’re starting from scratch?

You need to understand the landscape of company finances before thinking about systems and people. You have to have a picture of the company plan. This is a small company that wants to get big. How big? Where will it expand first? Does that affect legal and tax structures and treasury location? Then there are the standard treasury questions. What are the priorities? Which banks can help us going forward? How many employees do I need? What skills must they have?

Has treasury changed much since you joined?
Well we have gone from $50 million to nearly $300 million. We went public in January 2015. I have built a team that now runs cash management, investment and payments as well as financing. We have a nice simple structure because of our scalable business model and good planning – so we require fewer bank accounts. And that simplicity allows us to operate with fewer headcount and I still have plenty of time to remain engaged in the other areas I manage such as investor relations and operational excellence. I see my role being the chief capital structure officer because I manage all aspects of capital; internal cash generation, equity and debt. I have found this position to be extremely valuable.

It’s about balancing everyone’s needs and competing interests to create win-wins. Our internal teams want to grow as fast as we can but that requires capital because we are not yet net cash generating. Our equity holders want growth too but they also want positive cash flow over time, and our debt holders want to make sure they earn an appropriate return for the risk they are taking and that we can pay back our debt over time so cash flow profitability is really important to them. I spend a lot of time listening to all these parties, explaining our plans to address and why everyone should be comfortable.

How does such rapid growth affect treasury?

Of course keeping up with change is a key treasury challenge at any company. But in a small company that is multiplying in size so quickly, keeping up with that pace and growth is different. It really drives home the idea of building in scalability – creating processes that can grow with the company, being able

to handle the increases in customers – with the knockon effects on AP/AR, being able to handle cross-border growth and therefore FX hedging and cash management, and being able to cope with and use the explosion of data that rapid growth brings. And of course, you need to so all this without hiring a lot of people because although you’re growing, you’re still investing – you don’t have huge resources.

What did starting so small let you do in terms of technology?

We had great systems at eBay but they were costly and time consuming to implement. We didn’t go that route. We are a Cloud-based company and therefore we use Cloud and apps for everything we do. We will see many more business applications. Big companies have to contend with legacy systems but they too are moving in that direction. Some 51% of Fortune 500 companies today are using Box including well-respected companies like GE. The key issues for these companies are (1) getting used to using third-party apps, which many do not allow right now and (2) getting comfortable with the level of security behind those technologies. But the move from internal systems that are hard to upgrade and maintain to Cloud apps is real because of the ease of use of these technologies, cost-efficiency and the security behind solutions like Box is actually better.

What can treasury do to increase value/visibility to the CFO and the business?

In a high-growth, high-spend business managing cash flow is critical. Treasury needs to make sure that the CFO knows how much we are collecting and paying out and most importantly that we have enough capital for our growth journey. Investors and debt holders want to know this as well. In a small company everyone has more input and it is a natural part of the treasury role to provide strategic and business input as well as pure treasury information.

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